Assessing costs

How do you estimate the complexity of contentious probate litigation and how do you convert that into fee estimates? These are difficult enough questions - but possibly not as challenging as the next: how do you tell the client?

It is a risky strategy to provide a costs estimate which assumes that a potential claim will not involve complications or elements which could increase costs or even cause the costs to outweigh any potential benefit which the client may ultimately hope to recover from an estate.

Providing a realistic estimate to the client at the outset of a matter will alert the client early on to the potential costs that could be incurred in their claim up to and including a court trial. It is better that the client appreciates early on how any number of factors (even those that are yet unknown) could increase the costs they might have to pay and what the overall costs could be if they have to pursue their claim all the way to trial. The focus in contentious probate claims should always be on an early settlement wherever possible and therefore the majority of claims will incur costs far below a costs estimate provided up to trial.

An effective way of setting out costs is to separate each stage of work you envisage in the claim and provide an estimate for each. For example, investigating the possible claim, drafting your letter of claim and initial correspondence, drafting court proceedings (if necessary), the court issue fees and so on can be separated out to show the client what costs could be incurred if an early settlement cannot be reached. It is advisable to explain to the client that estimates are provided as a guide only based on the information you have at that time as the position can quickly change.

Monthly costs updates to clients will avoid any nasty costs surprises. If it quickly becomes clear that an interim estimate for a piece of work is not sufficient, a call to the client or an update letter will alert them to the increase in the estimate and the reasons for this. Taking an open approach will hopefully reassure the client that costs being incurred are necessary and reasonable. It could also help to avoid a costs complaint if the client suddenly receives a larger then anticipated invoice without early explanation.

Calculating potential costs is never easy '“ no two cases are alike in contentious probate claims. However, there are things to consider which will help make an estimate as realistic as possible for the client:

• Experience of colleagues will be invaluable as to possible complications that could arise or the likely parameters of costs to be expected in a particular type of claim.
• The nature of the assets in an estate will be relevant. Are all the assets in the UK? Was the deceased domiciled here but had some assets abroad?
• How far will people be willing to go to fight for a share particularly in large estates? Are there a high number of current beneficiaries of the estate and how many could become involved in the dispute?
• What is the initial stance taken by those parties? (A hostile beneficiary or even executor almost inevitably means protracted correspondence and therefore higher costs.)
• Consider the client as well. Do they have realistic expectations as to timescales and recovery? Will they need extra assistance to understand the litigation process/documents or correspondence?
• Is there any additional ongoing litigation within the estate or the family concerned?

All these elements will help when assessing costs and it may be necessary to provide the client with a 'worst case scenario' rather than sending out continuous costs revisions. Setting out the worst case in a claim (which will often be up to a full court trial, if the parties are hostile and cannot negotiate) will also help focus a client to the claim ahead of them and alert them as to what will be involved.

A client dealing with a contentious probate issue is likely to be emotional given the nature of the claim. They will be sensitive to costs as they may feel they are paying to recover something to which they already feel entitled. The client may state initially that 'it is the principle of the matter' but inevitably costs will become an important issue and the 'principle of things' gets put to one side in favour of a costs-effective settlement. Being clear and upfront with clients from the start should ensure that not only are continual estimate revisions unnecessary but that costs are not a huge shock to the client who will feel fully informed.